WASHINGTON, Nov 7 (Reuters) - The world's biggest eyeglass frame maker is planning to merge with the largest lens maker in a tie-up U.S. antitrust experts fear will be bad news for consumers, but could still be approved.

France's Essilor, the prescription lens maker, has asked U.S. regulators to bless its merger with Italy's Luxottica , the leading frame maker, to create a company that would produce everything from Ray-Bans to Giorgio Armani frames, and be the top U.S. eyeglass retail outlet as well as a leading provider of vision insurance.

No eyeglass company in the United States - the biggest market for both firms - would come close.

Opponents of the deal include not only smaller rivals, but also the U.S. Democratic Party which noted that eyeglasses were increasingly difficult to afford and said the industry was an example of one that has "seen rising concentration that deserves careful scrutiny, and enforcement."

Smaller rivals and optometrist groups worried about higher prices in their shops have met with Federal Trade Commission (FTC) staff to express concerns over the deal, according to a source familiar with the process. The eyeglass makers fear losing access to inputs such as lenses, according to two sources familiar with the process.

"There are clear problems here," said David Balto, a former FTC official now in private practice. "This (the deal) will make the problems worse."

U.S. antitrust enforcers rarely seek to stop these soup-to-nuts vertical deals - where a dominant company seeks to own steps along a supply chain - since it is difficult to write a lawsuit that proves that they directly raise prices. Antitrust enforcers must prove in court that a deal will hurt consumers.

But vertical mergers often have indirect, pernicious effects on the giants' smaller competitors in a way that leads to higher prices. Frame makers may not get the lenses they want, for example, if the new, bigger company withholds sales, according to two industry experts who asked not to be named to protect business relationships.

Despite this, six of seven antitrust experts said the deal was likely to be approved since the companies specialize in different aspects of the business. Still, several also expressed concern about the creation of an eyeglass giant with outsized clout.

"I would be surprised if they (the FTC) sued to block it. They might put some conditions on it," said Caroline Holland, a veteran of the Justice Department’s Antitrust Division. "A Democratic administration would have been more skeptical of this merger and more likely to block it."

Essilor and Luxottica spokespeople said that the deal was pro-competitive and said in similar statements that they were working with the FTC.

EU INVESTIGATES

The merger has already been approved by the competition authorities in several countries including India, Japan and New Zealand.

But European Union antitrust regulators opened a full-scale investigation in September - suspended in October while it waits for data - saying the deal may reduce competition and lead to higher prices. The final outcome there could hinge on concessions the two companies make.

Diana Moss, president of the American Antitrust Institute, worried that the combined company would refuse to sell to rival frame and lens makers. "Smaller frame rivals and smaller lens manufacturers are going to struggle. (The consumer) they'll pay higher prices," she said.

Luxottica, with Burberry, Chanel and Ralph Lauren frames, has 40 to 50 percent of the U.S. frame market, according to an industry and regulatory expert who spoke on background to protect business relationships.

Essilor has about 40 percent of the U.S. lens market, according to an industry executive who spoke privately to protect business relationships. Other lens makers, Carl Zeiss Group and HOYA Group, are considerably smaller.

Both companies declined to give U.S. market share data.

The two companies are the biggest U.S. retail eyeglass sellers. Essilor is No. 1 with Vision Source, a group of 3,300 optometric practices, while Luxottica, owner of Pearle Vision and LensCrafters is No. 2, according to the trade publication VisionMonday.